CHAPTER 2 LITERATURE REVIEW INTRODUCTION Following the introductory chapter, which provides some background information on the study, its objectives and limitations, this chapter, is devoted to describing the understanding of environmental ethics starting with the business responsibilities that comprise health risks, ecological risks and economic risks, the Malaysian environment, the manufacturing implications, the interactions, the evolution of ethics and environmental ethics itself. In this chapter, the concept and development of environmental ethics are discussed. The discussion falls under the related subtopics of environmental ethics development, the green movement, environmental ethics philosophy, environmental sustainability and ethical decision making. The other section of this chapter focuses on the cultural aspect, the manufacturing industry, the environmental ethics managers, the core themes of the corporations, the environmental ethics approaches, the environmental ethics motives, the benefits of environmental ethical commitment and selected empirical studies in environmental ethics. 2.1 THE BUSINESS RESPONSIBILITY Traditionally, environmental considerations have been abandoned by businesses that regard the natural world as “free” and “unlimited” and act as the source of raw materials and energy to meet human needs or as the repository for human-generated waste (Egri and Herman, 2000). Because of this, business functions and their intrusion into ecosystems have frequently had unfavourable effects, such as contaminating the ecology and scarring the globe (Fistere, 1998). Business produces
Transcript
CHAPTER 2
LITERATURE REVIEW
INTRODUCTION
Following the introductory chapter, which provides some background information on the
study, its objectives and limitations, this chapter, is devoted to describing the understanding
of environmental ethics starting with the business responsibilities that comprise health
risks, ecological risks and economic risks, the Malaysian environment, the manufacturing
implications, the interactions, the evolution of ethics and environmental ethics itself. In this
chapter, the concept and development of environmental ethics are discussed. The
discussion falls under the related subtopics of environmental ethics development, the green
movement, environmental ethics philosophy, environmental sustainability and ethical
decision making. The other section of this chapter focuses on the cultural aspect, the
manufacturing industry, the environmental ethics managers, the core themes of the
corporations, the environmental ethics approaches, the environmental ethics motives, the
benefits of environmental ethical commitment and selected empirical studies in
environmental ethics.
2.1 THE BUSINESS RESPONSIBILITY
Traditionally, environmental considerations have been abandoned by businesses
that regard the natural world as “free” and “unlimited” and act as the source of raw
materials and energy to meet human needs or as the repository for human-generated
waste (Egri and Herman, 2000). Because of this, business functions and their
intrusion into ecosystems have frequently had unfavourable effects, such as
contaminating the ecology and scarring the globe (Fistere, 1998). Business produces
dangerous products, exhausts oil reserves and produces an inertia that may result in
many kinds of dangers, such as smog, cancer, global warming, ocean pollution from
the production of fuel and through tankers spills, also other genetic effects from
easily producible propellants (Curran and Haw, 2001).
Today, business corporations have broader responsibilities to society besides
providing profits to their shareholders. The broader responsibilities are due to the
demand of a bigger population that the corporations have to serve. Saha and
Darnton (2005) developed a long list of these broader responsibilities. According to
them, the broader responsibilities of business corporations may include producing
not only products but safe products, providing high-quality reliable services,
applying ethical business practices, paying contribution to society, involvement in
social investment, exercising welfare and rights, considering health and safety,
offering employment, offering working conditions and practices, conducting fair
trade, responsibility in marketing and communication, involvement in stakeholder
affairs and also disclosing information, codes and conducts.
Above all, the social responsibilities of a corporation are to produce goods and
services, make profit for its shareholders, respond to the market and operate along
with the competitors. It is unfair for businesses if they are asked to do more than
those responsibilities stated above (Hoffman, 1991). Nonetheless, the broader
responsibilities stated by Saha and Darnton (2005) do not include the responsibility
towards the natural environment. The business corporations, according to them, do
not have the responsibility to protect the natural environment.
Bansal and Roth (2000) argue that by having motivations towards the ecology,
corporations will be associated with initiatives and benefits. Corporations would
benefit from higher profits, gain process intensification, gain a larger market share,
enjoy lower cost and differentiation, gain higher share price, rent-earning resources
and capabilities. They also emphasize that with legitimation, corporations would
gain long-term sustainability, survival, licence to operate, avoid fines and penalties,
lessen risk and achieve employee satisfaction while corporations would benefit from
feel-good factors, employee morale and individual satisfaction by engaging in social
responsibility. As stated in Table 2.10, all these benefits would be enjoyed by
corporations if they are motivated to respond to the ecology. Although the benefits
seem to be abstract and immeasurable, the anticipated benefits can act as a trigger
for the corporations to commit ethically.
Table 2.01
Initiatives and Benefits Associated with Motivations for Ecological Responsiveness
Competitiveness Housekeeping measures such as energy and waste
management, source reductions resulting in the
same output for the same level of output,
ecolabeling and green marketing, the development
of ecoproducts, and the adoption of environmental
management systems (EMS), such as BS 7750 and
the Eco-Management & Audit Scheme (EMAS).
Higher profits,
process
intensification,
larger market share,
lower costs,
differentiation,
higher share price,
rent-earning
resources and
capabilities.
Legitimation Complying with legislation, appointing an
environmental committee or environmental manager
to oversee a firm’s ecological impacts and advise
senior management, developing networks or
committees with local community representation,
conducting environmental audits, establishing an
emergency response system and aligning the firm’s
image with environmental advocates.
Long term
sustainability,
survival, licence to
operate, avoiding
fines and penalties,
lessening risks,
employee
satisfaction.
Social responsibility Redevelopment of local community areas to
greenfield sites, the provision of a less profitable
green product line, donations to environmental
interest groups and other local community groups,
use recycled paper, replacement of retail items or
office products with more ecologically benign items
and recycling the office wastes.
Feel-good factors,
employee morale,
individual
satisfaction.
Source: Bansal and Roth (2000), p. 727.
Besides the broader responsibilities of the corporations, Hoffman (1991) includes
ethical responsibilities. Corporations have the ethical responsibility to become a
more active partner in dealing with social concerns. Both Hoffman (1991) and
Prince and Denison (1992) agree that business corporations are urged to think
creatively to find solutions and not to create problems in order to achieve
environmental success, as it has become an aspect of the search for total quality
(Cairncross, 1992).
However, Caroll (1979) emphasizes that between discretionary responsibilities,
ethical responsibilities, legal responsibilities and economic responsibilities that
transformed total social responsibilities (as shown in Figure 2.01); ethical
responsibilities, as included by Hoffman, ranked the most difficult responsibilities
to comprehend. It would be difficult and ethically hard for the corporations to carry
the broader responsibilities as well as to be motivated towards ecology.
Figure 2.01
The Social Responsibility Categories
Source: Caroll (1979), p. 499.
Discretionary Responsibilities
Ethical Responsibilities
Legal Responsibilities
Economic Responsibilities
TOTAL SOCIAL RESPONSIBILITIES
2.1.1 HEALTH RISK
The interactions of business activities and the natural environment bring
tremendous risk to the environment, to people’s health as well as to the
economy. Health related considerations would vary from releasing
chlorofluorocarbons (CFCs) for food preservation and temperature control
into the atmosphere that is not really going to harm us but constitutes a risk
for future generations (Madia, 1992) by depleting the ozone layer. Synthetic
insecticides have been used to kill insects and this causes the destruction of
crops and illness due to “pesticides” that will generally affect birds and
mammals (Graedel and Allenby, 1995). Health risks include many health
problems such as impairment, contraction of diseases, health implications
not only to the present population but also to future generations.
The main air pollutants, such as vehicles, power plants, industrial vehicles,
domestic waste, industrial processes and municipal waste that are shown in
Figure 2.02, can cause lung and heart malfunctions, bronchitis and asthmatic
reactions, while the haze leads to accidents, death (Foon and Kong, 1998)
and the difficulty in breathing through coughing and wheezing could also
result in aggravation of existing cardiac respiratory conditions (TPM, 1997).
In the worst case, human chance of death will be increased by one in a
million, if we breathe New York’s polluted air for two days (Wilson, 1990).
In terms of food consumption, it is very hard to avoid consuming food that
contains potentially dangerous additives or pesticide residues as we often
have limited means of discovering their presence (Thiele, 2000).
Table 2.02 represents the main effects of the components of haze on human
beings. It comprises carbon monoxide and hydrocarbons that are caused by
vehicles; sulphur dioxide, which is caused by power plants and industrial
fuel; nitrogen dioxide, which is caused by vehicles and power plants, and the
main pollutant in the current trans boundary haze is the particulates that are
caused by the industrial processes. Among other health problems, carbon
monoxide could weaken heart contractions; sulphur dioxide could cause
bronchitis; nitrogen dioxide could aggravate asthma; ozone could cause
chest pain, sore throat and coughing; particulates could damage lung tissue
while lead could destroy the brain and nervous system.
Figure 2.02
Air Pollutants in Malaysia
Air pollutants
Note: Air pollution caused by earthworks, land clearing and burning of agricultural waste at plantations are not computed by the DOE (Department of Environment).
Source: DOE
Source: Foon and Kong (1998).
Table 2.02
Main Haze Components
Component Effects Source
Carbon
Monoxide
Weakens heart contractions and lowers the
amount of oxygen carried by the blood.
Reduces the ability to exercise and is
dangerous for people with chronic heart
disease.
Primarily from motor
vehicles but also from
incomplete burning of any
fossil fuel.
Sulphur
Dioxide
Aggravates existing diseases, especially
bronchitis. Constricts breathing passages in
asthmatic persons and those doing moderate
to heavy exercise. Causes wheezing,
shortness of breath and coughing.
Power plants, large industrial
facilities, diesel engines and
oil-burning home heaters.
Nitrogen
Dioxide
Irritates the nose and throat, especially in
people with asthma. Increases susceptibility
to respiratory infections.
Power plants, large industrial
facilities and motor vehicles.
Ozone Irritates lungs and breathing passages,
causing chest pain, sore throat and coughing.
Increases susceptibility to respiratory
infections and reduces the ability to exercise.
Effects are more severe in people with
asthma and other respiratory ailments.
Ozone forms when sunlight
interacts with exhaust
hydrocarbons with nitrogen
oxides.
Particulates Aggravates heart and lung disease, changes
the body's defences against inhaled materials,
and damages lung tissue. The elderly,
children and those with chronic lung or heart
diseases are most sensitive.
Diesel powered cars, trucks
and buses, power plants and
factories.
Lead Destroys the brain and nervous system. Some industrial facilities and
lead based paint.
Source: Foon and Kong (1998).
2.1.2 THE ECOLOGICAL RISK
Ecological risk is another risk in consideration to environmental issues.
According to Ives (2000), more than 50 per cent of the world’s land surface
has been transformed and used in supplying freshwater for human use and
we have actually used non-renewable energy by engaging in land
deforestation activities. This produces enormous waste that results in water
supply contamination, which will worsen human activity.
Graedel and Allenby (1995) argued that in order to increase food supply, the
human use of crop growth agents such as nitrogen and phosphorus fertilizer
that will eventually result in lake eutrophication and human use of wood and
coal for cheap and readily available sources to create energy for consumer
and industrial use will cause deforestation and climate change. Table 2.03
represents some examples of past problems, technological “solutions” and
the long-term consequences from continued practice of the technology. The
problems cause ozone depletion, adverse effects on birds and mammals,
deforestation, global climate change and lake eutrophication.
Table 2.03
Past Problems, Technological “Solutions” and the Long Term Consequences from
Continued Practice of the Technology
Problem / Need
Technology as Solution Consequences
Food preservation,
temperature control:
nontoxic, non-flammable
refrigerant
Chlorofluorocarbons(CFCs) Stratospheric Ozone
Depletion
Destruction of crops,
illness due to "pests": agent
to kill insects
Synthetic insecticides Adverse effects on
birds and mammals
Energy for consumer and
industry use: cheap and
readily available source
Wood, coal Deforestation, global
climate change
Increased food supply:
agent to aid crop growth
Nitrogen and phosphorus
fertilizers
Lake eutrophication
Source: Derived from Graedel and Allenby (1995).
From the above table, it is clearly shown that CFCs were used to fulfil the
need to preserve food, control the temperature and the need of nontoxic
refrigerants, which has caused major environmental degradation such as
stratospheric ozone depletion. The use of synthetic insecticides to curb crop
destruction will affect animals severely, especially birds and mammals,
which will result in their extinction. Wood and coal are needed for human
use for cheap energy, notwithstanding that we are actually reducing our
forest area, thus, resulting in global climate change that can cause global
warming and dangerous acid rain. Many lakes were killed from the use of
nitrogen and phosphorous fertilizers that were used to increase our food
supply.
In Ives’s article (2000), a Commonwealth Scientific and Industrial Research
Organization (CSIRO) scientist estimated that all these activities decreased
oxygen and increased carbon dioxide in the atmosphere to an estimated 70
per cent more than 200 years ago. In addition, Ives (2000) emphasized that
carbon dioxide will create a greenhouse effect that leads to global warming
and climate change when it is combined with other gases in the air. Table
2.04 represents carbon dioxide emissions from fossil-fuel burning, cement
production and gas flaring (thousands of metric tons of carbon) in Malaysia,
Indonesia and Thailand. The three countries showed an increasing figure
from year to year and in the 25 years from 1970 to 1995, Malaysia
experienced a very high increase in carbon dioxide emissions. Table 2.05
represents world carbon dioxide emissions by region from 1990 to 2025, and
which are projected to continue increasing for the next 20 years.
Table 2.04
Carbon dioxide emissions from fossil fuel burning, cement production and gas flaring
(thousands of metric tons of carbon).
Year Indonesia Malaysia Thailand
1970 9,047 3,934a 4,190
1980 25,825 7,636 10,921
1990 58,206 14,999 25,971
1995 80,821 29,095 47,773
a Figure for 1966 for the Federation of Malaysia and Singapore.
Source: Oak Ridge National Laboratory (1998) as in Global Environmental Change
and Sustainable Development in Southeast Asia: Science Plan for a SARCS
Integrated Study.
We are also surrounded by the issues of burning rivers, dying lakes, oil
fouled oceans, radioactivity in our food, lead and mercury in our water
Human/Nature Separation Maintenance of Diversity Extension of Moral Consideration to Nature
Patriarchal Dualistic Simplistic Lack of Social Concern
Deep Ecology Naess Duvall Sessions
Biocentric Diversity Egalitarianism
No Interference with Nature Economic & Ideological Change Necessary Appreciate Life
Hierarchical Deprives Individual of Value No Criteria for Assessment
Ecofeminism Salleh Kheel Warren Cheney
Emotions Gift Economy Web of Life Relations
Male Domination of Nature & Women Subject/Object Alienation Relationship Oriented Validity of Emotions Connections Between All Forms of Oppression Context of Issue
Dualities Denial of Responsibility “Scapegoating” Men
Transcending Dualities Illusion of Objective Observer Articulation of Processes and Relatedness as Central Value Avoidance of Relativism Cultural Understanding
Source: Fox and McAvoy (1991).
Table 2.16
Reference Guide to Environmental Ethics
General Approach Summary of ethical position Mainstream Accounting
Generally assumes the environment to be an “externally” and not a direct responsibility of the organization. Ethical responsibilities are extended to a limited group, which includes shareholders as primary stakeholders. This perspective allows for an ethical position founded on the maximization of personal utility, often in the form of profits and often at the expense of the long-term viability of the natural environment. If the environment is considered, it is often done so from the perspective of the organization’s interests. Anthropocentric: centred around humanity and decisions are made in the interests of humans over the interests of other living organisms. If environmentally sustainable behaviour is encouraged, it is done so on the basis of human interest.
Deep Ecology Ethics based on non-anthropocentric belief systems. Cultural practices are placed in the context of a greater living cosmos and decisions are assessed in light of the effect on the broader living organism of which the self is part. Often encourages a spiritual dimension within the ethical framework and draws on the teachings of indigenous and Eastern philosophy to help inform relationships with nature.
Social Ecology Ethics based on non-hierarchical relationships among people and nature. Cultural practices are challenged to become egalitarian and promote equity and move away from oppressive relationships of domination. Recognizes social and environmental relations are affected by power structures and encourages these relationships to allow for self-determinism and encourage the maximization of nature, community and self-potential.
Eco-Feminism Encourages an ethical perspective that challenges patriarchal structures that have often equated with nature. Challenges social and environmental relations to become more inclusive of the ‘Other’, which includes women, nature, and the poor and people form non-European backgrounds. Offers a sophisticated analysis of gender and the role of these relations in the oppression of nature, suggesting an inclusive environmental ethic informed by ‘Other’ perspectives that resist the domination of patriarchal relationships with nature.
Post-modern Environmentalism
An emerging area that resists absolutes as a way out of the environmental crisis. Encourages a dialogue with cultural, gender and class ‘difference’ and offers an analysis of language, text and discourse in the construction of the environmental crisis. It is an ethical perspective that encourages a re-imagination of nature as a site of multiplicity and multi-vocality and offers visibility and validity to environmental perspectives that have been excluded or erased form the main texts that dominate both mainstream environmentalism debate.
Source: Andrew (2000), p. 198.
In another corner, Minteer et al. (2004) have come out with a range of
general environmental ethical principles that employ ethical statements
represented by five distinct normative groupings. They proceed by
indicating that in the environmental philosophy and history literature, the
ethical principles move from strongly anthropocentric environmental ethics
to strongly non-anthropocentric. This ethical principal is represented in
terms of environmental ethics typology, as shown in Table 2.17.
The table is represented in terms of normative grouping, environmental
ethics and representative statements. For normative grouping of Anti-
environment, their environmental ethics would be a threat to survival and
spiritual evil and the representative statement for anti-environment would
be: nature can be dangerous to human survival and nature can be spiritually
evil. This is followed by Benign Indifference, Stewardship and Radical
Environmentalism normative group with its own environmental ethics and
representative statement.
Table 2.17
Environmental Ethics Typology
Normative Grouping
Environmental ethics Representative statement
Anti-environment Threat to survival Spiritual evil
Nature can be dangerous to human
survival.
Nature can be spiritually evil.
Benign indifference Storehouse of raw materials Religious dualism Intellectual dualism
Nature is storehouse of raw materials that should be used by humans as needed. Humans were created as more important than the rest of nature. Because humans can think, they are more important than the rest of nature.
Utilitarian conservation
Old humanitarianism Efficiency Quality of life
Cruelty toward animals makes people less human. The supply of goods and services provided by nature is limited. Nature adds to the quality of our lives (for example, outdoor creation, and natural beauty).
Human survival depends on nature and natural processes. It is our religious responsibility to take care of nature. Nature will be important for future generations. Nature is God’s creation. All living things are sacred.
Radical environmentalism
Humanitarianism Organicism Pantheism Natural Rights
Animals should be free from needless pain and suffering. All living things are interconnected. All living things have a spirit. All living things have a moral right to exist.
Source: Minteer et al. (2004), p. 145.
2.8 THE GREEN MOVEMENT
The development of environmental ethics coincides with the rise of green
consumerism (Ives, 2000). This can be seen in the rise of many publications
regarding the natural environment. All these publications impose the various
authors’ views, expertise, and knowledge; some of them are listed in Table
2.18 below (for additional references). Included as references are: The
Corporate Response to the Environmental Challenge, Environmental
Strategies for Industry: International Perspectives on Research Needs and
Policy Implications, Earth in the Balance: Ecology and the Human Spirit,
“America’s Green Strategy” and Changing Course: A Global Business
Perspective on Development and the Environment.
Saha and Darnton (2005) argued that the scope of green meaning is
considerable. They relate to many issues and some of the issues are
ecological concerns, conservation of planet and animal, corporate social
raw materials, sourcing and supply, receipt and environmental disposal of
used products and product components.
Table 2.20
The Green Value Chain Support activities
Primary activities Inbound Operations Outbound Marketing and Service Logistics Logistics Sales
Transport
impacts
Storage
modes
“Green
consumables”
Clean
technologies
Recyclable
packaging
Storage modes
Transportation
modes
Raw materials
Sourcing and
Supply
Receipt and
environmental
disposal of
used product or
product
components
Technology development
Waste management Alternative raw material and energy sources
Clean technologies Pollution minimization and control Energy efficient
Finished product recyclability
Packaging reduction and disposal Innovatory “Green” products
Disassembly Restoration
Human resource management
Staff selection Supplier selection
Corporate culture training programs Corporate environmental awareness
Sub contractual arrangements
Internal and external communication and community liaison
Incentives Rewards for green ideas and practices
Management systems
Inventory
reduction
Recyclability
“Just-in-time”
processes
Product life
cycle analysis
Recycling and
recovery
Infrastructure
Green new-
product
development
R&D
Quality circles
and
environmental
standards
assurance
Source: Saha and Darnton (2005), p.125.
2.9 ENVIRONMENTAL ETHICS PHILOSOPHY
Environmental ethics emerged as a new sub-discipline of philosophy in the early
1970s by posing a challenge to traditional anthropocentrism, a human centred way of
thinking (Brennan and Yeuk-Sze-Lo, 2002; Partridge, 1980), in conjunction with the
opposite theory of non-anthropocentrism. These theories are represented by Table
2.21, a typology of theories within environmental ethics. Theoretically,
anthropocentric places the human species at the centre of the human moral universe.
However, human beings are not the only moral agents in the world; they are only
creatures with oral interests of “intrinsic” worth. In anthropocentrism the rest of
nature has no such interest and only has worth to the extent that it is instrumental in
meeting the needs of the people. Anthropocentrism can be divided into: 1) Egocentric
and 2) Homocentric varieties. Non-anthropocentrism is represented by 1)
Biocentrism and 2) Non-Anthropocentrism or Ecocentric (Thompson, 1998).
In an extreme corner, egocentric perspectives regard man as the master or the
justification of the natural community (Partridge, 1980) and the theories are normally
related with laissez faire liberalism, capitalism, and the free market. In addition,
generally, the theories pay scant attention to environmental concerns as nature is seen
as a resource to be exploited for human benefit (Thompson, 1998). The prominent
contributors in egocentric theories are Thomas Hobbes, John Locke, Adam Smith,
Thomas Malthus and Garret Hardin while J. S. Mill, Jeremy Bentham, Barry
Commoner and Murray Bookchin represent anthropocentric theories (Thompson,
1998).
Table 2.21
A Typology of Theories within Environmental Ethics
Egocentric Anthropocentric/Homocentric Self-interest Laissez faire’ Mutual coercion (mutually agreed) Classical economic Capitalism New Right Thomas Hobbes John Locke Adam Smith Thomas Malthus Garret Hardin
Greatest good for the greatest number Stewardship of nature (for human use and enjoyment). Utilitarianism. Marxism. Eco-socialism ‘Shallow’ ecology J.S. Mill Jeremy Bentham Barry Commoner Murray Bookchin
Source: Thompson (1998).
Thompson (1998) argues that the Anthropocentric/Homocentric view perceives all
moral claims in terms of humans and their interest (Hoffman, 1991). More
commonly, anthropomorphic theories can be described as homocentric as they are
grounded in notions of welfare and social justice. Both utilitarianism and Marxism
are categorized as homocentric theories. If utilitarians come to regard the stewardship
of the natural world as an important priority, it would only be because this, in turn,
contributes to the greatest happiness to the greatest number of people (Thompson,
1998). This theory also put the “dignity of personhood” in front of nature (Partridge,
1980).
Biocentric environmental ethics comprise all things which are alive or which are a
vital part of an ecosystem (Hoffman, 1991). Plant and animals were included when
Biocentric environmental ethics extend beyond the boundaries of moral significance.
Some philosophers advocate the principle of biocentric egalitarianism (Bio-
egalitarianism) according to which human lives are not just a part of nature, they are
an equal part of nature (Thompson, 1998).
Non-anthropocentrism/Ecocentrics start from a radically different position. They base
their ethics on the view that all living things, and in some theories, even non-living
things like rocks or mountains, have intrinsic moral value and humans, therefore, owe
a duty to them (Thompson, 1998). From the researcher’s point of view, Figure 2.16 is
developed to visualize the “centricisms” that gives a clear picture of these categories.
From evolutionary perspectives, environmental ethics has been visualized in terms of
a tree and the researcher visualized environmental attitudes in terms of a cake.
Anthropocentrics reflect the concern of human beings as a subset of biocentrics that
comprises the concerns of the animals while both antropocentrics and biocentrics are
the subsets of ecocentrics, which concerns all parts of nature: trees, land and water,
animals and people. Rowe (1990b) has portrayed the attitudes that should govern
people’s relationship with the environment. The attitude that is slowly killing the
world and, which, if continued, will finish the human race is Anthropocentrism,
which is the religion of humanism that puts people first in all matters. The highest
goal of anthropocentrism is service only to the human community. It is our legacy of
many thousands of years; the natural mood of a conscious species inclines to be self-
congratulary and short on ecological sense.
Figure 2.16
Ecocentric, Biocentric and Anthropocentric
Source: The researcher.
The saving attitude, the attitude in short supply is ecocentrism, which identifies the
ecosphere as a centre, a main point not only for ethics but also for arts and religion.
However, ecocentrism is challenged by the cultural obstacles. The goals of traditional
management are to achieve growth and shareholders wealth while ecocentric
management aims for sustainability and quality of life as well as stakeholder welfare.
Table 2.22 views the traditional versus ecocentric management in terms of goals,
values, products, production systems, organizations, environment and business
functions.
Table 2.23 represents the Alternative Environment Paradigms in terms of ontological
and ethical, scientific and technological, economics and psychological. It would be
interesting to compare traditional and ecocentric management. The goals of
traditional management would be to achieve economic growth and profit and
shareholder wealth while the goals of ecocentric management are sustainability and
quality of life, and stakeholder welfare. In traditional management, the products are
designed for function, style and price, which leads to wasteful packaging, while in
ecocentric management the products are designed for the environment to achieve
Sustainability and quality of life Stakeholder welfare
Values: Anthropocentric Rationality and packaged knowledge Patriarchal values
Biocentric or Ecocentric Intuition and understanding Post patriarchal friendly
Products: Designed for function, style & price Wasteful packaging
Designed for the environment Environment friendly
Production system: Energy & resource intensive Technical efficiency
Low energy & resource use Environmental efficiency
Organization: Hierarchical structure Top-down decision making Centralized authority High-income differentials
Non-hierarchical structure Participative decision making Decentralized authority Low-income differentials
Environment: Domination over nature Environment managed as a resource Pollution and waste are externalities
Harmony with nature Resources regarded as strictly finite Pollution/waste elimination and management
Business Functions: Marketing aims at increasing consumption Finance aims at short-term profit maximization Accounting focuses on conventional costs Human resource management aims at increasing labour productivity
Marketing for consumer education Finance aims at long-term sustainable growth Accounting focuses on environmental costs Human resource management to make work meaningful & the workplace safe/healthy
Source: Shrivastava (1995b), p. 131.
Table 2.23
Alternative Environment Paradigms
Key Assumptions Technocentrism Sustaincentrism Ecocentrism A. Ontological & Ethical
1. Metaphor of earth 2.Perception of earth 3.System composition 4. System structure 5. Human and nature 6. Human role 7. Value of nature 8. Ethical grounding 9. Time/space scales 10. Logic/reason
Life support system Home/managed Parts and wholes Halochical Interdependence Stewardship Inherentism Broad homocentric Multiscale Vision/network
Mother/web of life Alive/sensitive Organic/wholes Hierarchical Indisassociation Plain member Intrinsicalism Whole earth Indefinite Holism/spiritualism
B. Scientific & Technological 1. Resilience of nature 2.Carrying capacity limits 3. Population size 4. Growth pattern 5. Severity of problems 6. Urgency of solutions 7. Risk orientation 8. Faith in technology 9.Technological pathways 10.Human vs. natural capital
Tough/robust No limit No problem Exponential Trivial Little/wait Risk taking Optimism Big/centralized Full substitutes
C. Economic & Psychological 1. Primary objective 2. The good life 3. Human nature 4. Economic structure 5. Role of growth 6. Poverty alleviation 7. Natural capital 8. Discount rate 9. Trade orientation 10.Political structure
Efficient allocation Materialism Home economics’ Free market Good/necessary Growth trickle Exploit/convert High/normal Global Centralized
Ecological integrity Postmaterialism Homo sapient Green economy Mixed/modify Equal opportunity Conserve/maintain Low/complement National Devolved
Ecological integrity Antimaterialism Homo animalist Steady state Bad/eliminate Redistribution Enhance/expand Zero/inappropriate Bioregional Decentralized
Source: Gladwin et al. (1995), p. 883.
According to Shrivastava (1995b), in action of Ecocentric, management proliferates
all aspects of organization mission, inputs through and outputs. Shrivastava argues
that Ecocentric management seeks ecofriendly product designs, packaging and
material use and they seek to systematically renew natural resources in order to
minimize waste and pollution. Ecocentric management encourages the use of low
energy and small amounts of resources as they have scaled appropriately, provide
meaningful work, decentralized participatory decision making, have low earning
differentials among employees and non-hierarchical structures. Ecocentric
management also establishes a harmonious relationship between the natural and
social environment.
Shrivastava (1995b) also emphasizes that marketing in ecocentric management seeks
to educate customers about responsible consumption, instead of promoting
unrestricted consumption. The finance aims for long-term sustainable growth, instead
of short-term profits, accounting seeks to incorporate the social and environmental
costs of production instead of externalizing them while management in ecocentric
management seeks to provide meaningful work and safe working conditions, instead
of single-mindedly pursuing labour productivity. According to Shrivastava, in
ecocentric companies, their mission and vision include a corporate commitment to:
1) minimize the use of virgin materials and non-renewable forms of energy.
2) eliminate emissions, effluents and accidents, and
3) minimize the life cycle cost of products and services.
2.10 ENVIRONMENTAL SUSTAINABILITY
It was predicted that the most important issues in the next century would be the issues
related to the environment (Schmidheiny, 1992). Schmidheiny (1992) and his
colleagues provided a vision of “sustainable development” at the 1992 Earth Summit
in Rio de Janeiro. They saw that there is a linkage between environmental protection
and economic growth. Table 2.24 represents the hyper norms and selected
environmental principles that contribute to these linkages. Principle 1 concluded that
human beings are at the centre of the concerns for sustainable development. They are
entitled to a healthy and productive life in harmony with nature. Principle 2
concluded that the right to development must be fulfilled so as to equitably meet the
developmental and environmental needs of the present and future generations and
principle 16 concluded that national authorities should endeavour to promote the
internalization of environmental costs and the use of economic instruments, taking
into account the approach that the polluter should, in principle, bear the cost of
pollution, with due regard to the public interest and without distorting international
trade and investment.
In 1997, the Kyoto Protocol – a codicil to the United Nations Framework Convention
on Climate Change (UNFCCC) – was signed in Japan. The Kyoto Protocol commits
most industrialized countries to reducing their emissions by six to eight per cent
below 1990 levels by 2012. Ten years later (in 2007) in the conference of the Parties
(COP13) the Bali Roadmap was formulated as a step towards reaching final
agreement on the success to Kyoto (van der zee, 2008)
Table 2.24
Hypernorms and Selected Environmental Principles
Rio Declaration and Selected Environmental Principles Principle 1 Human beings are at the centre of concerns for sustainable development.
They are entitled to a healthy and productive life in harmony with nature.
Principle 3 The right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations.
Principle 4 In order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it.
Principle 10 Environmental issues are best handled with the participation of all concerned citizens, at the relevant level. At the national level, each individual shall have appropriate access to information concerning the environment that is held by public authorities, including information on hazardous materials and activities in their communities and the opportunity to participate in the decision making processes.
Principle 14 States should effectively cooperate to discourage or prevent the relocation and transfer to other States of any activities and substances that cause severe environmental degradation or are found to be harmful to human health.
Principle 15 In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.
Principle 16 National authorities should endeavour to promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear the cost of pollution, with due regard to the public interest and without distorting international trade and investment.
Principle 22 Indigenous people and their communities and the other local communities have a vital role in environmental management and development because of their knowledge and traditional practices. States should recognize and duly support their identity, culture and interests and enable their effective participation in the achievement of sustainable development.
Source: Logsdon (2004), p. 76.
By capturing the environment as a commodity (Egri and Herman, 2000), corporations
could identify environmental strategies (Starik and Rands, 1995), understand the
decision process (Cordano and Frieze, 2000), understand organizational participants
(Flannery and May, 2000) and reintegrate humanity and ecology (Gladwin et al.,
1995), which could advance long-term ecological or organizational sustainable
development.
Parallel to the understanding of organizational participants, Hart (1997) argues that
corporations must change the way the participants think, especially the customers, in
order to create products and services preferred by them that are consistent with
sustainability and enable the corporations not only to be known as marketers but also
to be known as educators. In doing so, corporations must lower material and energy
consumption, develop clean products and technology, reduce pollution burdens, build
the skills of the poor, ensure sustainable use of nature’s economy, replenish depleted
resources and foster village-based business relationships (Logsdon, 2004), as shown
in Figure 2.17.
Figure 2.17
Building Sustainable Business Strategies
Source: Hart (1997), p. 75.
Sustainable development has been defined in many ways. The World Commission on
Environment and Development (1987:7) defines sustainable development as a
“process of change in which the misuse of resources, the direction of investment, the
orientation of technological development and institutional change are made constant
with future as well as current needs”.
Gladwin et al. (1995) outline various terms by several authors in order to define
sustainable development. The term includes vision expressions, value change, moral
development, social reorganization and transformational process. They have also
come out with the components of sustainable development, operational principles and
techniques of biophysical sustainable behaviour.
The components include inclusiveness, connectivity, equity, prudence and security
while the operations and techniques are shown in Table 2.25. The sustainable
principles include assimilation, regeneration, diversification, restoration,
conservation, dissipation, perpetuation and circulation. Sample techniques include
relationships and technology transfer. The sustainable variables are differentiated in
terms of least cost, differentiation and niche. Corporations will sustain a competitive
advantage if they offer variables of design and ecological packaging, employees and
customers specialized in safety, health and environmental programme training.
In order to represent the sustainable versus unsustainable sectors, Henderson (1991)
developed a table that outlined the unsustainable sector to be compared to the
sustainable sector or the emerging sectors. The table differentiated both sectors in
terms of their industry. Examples are recycling ability, bureaucracy and military
contracting, as shown in Table 2.27. This table represents restructuring industrial
economies. Henderson emphasizes that marketing opportunities are created from
better consumer information and product labelling. This is true as corporations can
recycle the waste and find its new uses in order to venture into new emerging
economies such as in food industry, cosmetics industry, paper products industry,
household products industry as well as other upstream industries that could be
adjusted to meet the environmental requirements.
Table 2.26
Sustainable Competitive Advantage
Sustainability
Variables
Least Cost Differentiation Niche
Product/services Standardized
ecological designs
Variable design,
Ecological
packaging
Choose
ecologically safe
products
Operational
improvements
Use clean
technologies,
Resource
conservation
Regulation
compliance,
Very expensive
Limited scope,
Protect SHE from
cost pressure
Employee/custome
r education
Basic SHE training,
Product labelling
Specialized SHE
training
Learn from
customers
Prior precautions Impact assessment,
Emergency plans
critical
Differentiated
emergency plans
Embedded in
product choice
Contractor/supplie
r relationships
Critical for cost,
Build partnerships
Streamline
management of
multiple vendors
Selective focus on
key vendors
Technology
transfer
Inexpensive, low
risk
Expensive, risky Very expensive,
highly risky
SHE = Safety, health and environmental programmes
Source: Shrivastava (1995a), p. 950.
Table 2.27
Restructuring Industrial Economies
Obsolescent sectors (Unsustainable, entropic)
Emerging sectors (Sustainable, low entropy)
Industries, companies based on heavy use of non-renewable energy and materials Bureaucratic, large, less flexible Non-recyclable products, packaging Military contracting Products involving toxic, non-biodegradables, polluting materials, throwaway items Planned obsolescence Chemical pesticides, inorganic fertilizers Heavy farm equipment Polluting, inefficient capital equipment, process machinery, processing systems Extractive industries with low value added Fossil fuels, nuclear power generation High tech hospital-based medical care Highly processed foods Advertising encouraging waste and polluting practices Shopping centre developers
Industries, companies based on efficient use of energy and materials and human skills Entrepreneurial, small, flexible Recycle products, remanufacturing Conservation, innovation Fuel-efficient motors, cars, mass transit Solar, renewable energy systems Communication, information, services Infrastructure, education training Space communications satellites Peace keeping, surveillance of treaties Efficient capital equipment, processes Restorative industries, reforestation, desert greening, water quality management Health promotion and disease prevention Organic agriculture, low till systems Integrated pest management Pollution control, clean-up and reuse Natural foods Waste recycling and reuse Community design and planning “Caring” sector
Source: Henderson (1991), p. 75.
Starik and Rands (1995) have identified five levels of analysis that bear upon the
presence and or absence of ecological sustainability. They include the individual,
organizational, political-economic, social cultural and ecological levels. This level of
analysis is shown in Figure 2.18. However, by having depicted them, they did not
explain the interactions, which they left for future research.
Figure 2.18
The Ecological Sustainability (five level analyses) Web
Source: Starik and Rands (1995), p. 913
In order to achieve sustainability of the biosphere, some alterations must be done by
the corporations. According to Ayres (1992), practically they must reduce the
extraction of virgin ores of toxic heavy metals, change many industrial processes, and
curb the use of toxic, mutagenic and carcinogenic metals. “Spiritually” the
corporations are also urged to pledge and support the environmental guideline,
namely, the “Business Charter for Sustainable Development”.
Figure 2.19 represents the outline of 16 principles of the “Business Charter for
Sustainable Development”, which was introduced at the World Industry Conference
on Environmental Management held in April 1991 (Easterling et al., 1996). [Please
refer Appendix Table 5 for the explanation of the Business Charter for Sustainable
Development, which comprises 16 themes that corporations should look into].
Figure 2.19
The Business Charter for Sustainable Development
The Business Charter For Sustainable Development Principles for Environmental Management IOC International Chamber of Commerce
1. Corporate priority 2. Integrated management 3. Process of improvement 4. Employee education 5. Prior assessment 6. Products and services 7. Customer advice 8. Facilities and operations 9. Research 10. Precautionary approach 11. Contractors and suppliers 12. Emergency preparedness 13. Transfer of technology 14. Contributing to the common effort 15. Openness to concerns 16. Compliance and reporting
Source: Easterling et al. (1996), p. 22.
The aim of sustainable development is to achieve zero emission, zero pollution and
zero waste (McDonough, 1998), however, to achieve zero discharge or no pollution
at all is impossible. If corporations understand the concept of ecological sustainability
(Please refer Appendix Table 6), they could achieve several benefits to ecological
sustainability such as driving down the operating cost, competitive advantage, to
become environmental leaders, maintain and enhance corporate image, reduce long-
term risk, benefits ecosystems and communities and achieve a firmer legal footing
(Shrivastava, 1995a).
However, there are several major challenges to sustainability. The process of
achieving sustainability involves a tremendous amount of money (Hart, 1997) and
leads to severe pollution, depletion and poverty, as shown in Table 2.28. Developed
economies face greenhouse gases, use of toxic materials, contaminated sites, scarcity
of materials, insufficient reuse and recycling, urban and minority and unemployment.
Emerging economies experience industrial emissions, contaminated water, lack of
sewage treatment, over exploitation, overuse of water for irrigation, migration to
cities, lack of skilled workers and income inequality. Survival economies experience
the worst scenarios including dung and wood burning, lack of sanitation, ecosystem
destruction due to development, deforestation, overgrazing, soil loss, population
growth, low status of women and dislocation.
However, in order to counter this scenario, corporations could reduce their corporate
footprint, avoid collision and meet basic needs in order to achieve success. This idea
was suggested by Hart and Mielstein (1999). Table 2.29 represents the sustainability
tied to three economies that relate to key business and financial payoffs. A consumer
economy can reduce corporate footprints, an emerging economy can avoid collision
and a survival economy can meet their basic needs.
Table 2.28
Major Challenges to Sustainability
Pollution Depletion Poverty
Developed
economies
Greenhouse gases
Use of toxic
materials
Contaminated sites
Scarcity of
materials
Insufficient reuse
and recycling
Urban and
minority
Unemployment
Emerging
economies
Industrial emissions
Contaminated water
Lack of sewage
Treatment
Over exploitation
or
renewable
resources
Overuse of water
for irrigation
Migration to cities
Lack of skilled
workers
Income inequality
Survival
economies
Dung and wood
burning
Lack of sanitation
Ecosystem
destruction due
to development
Deforestation
Overgrazing
Soil loss
Population growth
Low status of
women
Dislocation
Source: Hart (1997), p. 70.
Table 2.29
New Metrics, Improved Payoffs
Drivers Matrices Payoffs
Consumer Economy
Reducing Corporate
Footprints
Pounds of materials per
sale.
Pounds to toxics per sale.
Greenhouse gas emissions
per sale.
Public acceptance
reputation.
Earning Growth.
Increased EVA/SVA.
Emerging Economy
Avoiding Collision
Emissions per sale.
Water use per sale.
Land conserved compared
to land use.
Number of jobs created.
Sales growth.
Stock Preference.
Survival Economy
Meeting Basic Needs
Percentage of sales to
survival economy.
Breadth of products
availability.
Social investment compared
to wages.
Small-scale vs. large-scale
applications.
Community-enhancing vs.
community-degrading.
P/E Ratio.
Share of New Wealth.
Source: Source: Hart and Mielstein (1999), p. 30.
2.11 ETHICAL DECISION MAKING
Kauffman (2001), stresses that ethical decision making can balance the economy and
the environment. In decision making behaviour, managers do realize that their
decisions might affect humankind and its nature leads them to be ethically involved.
Decisions made can result in tremendous social consequences, especially to the state
of wellbeing of consumers, employees and the community (Trevino, 1986).
According to Berry (2002), besides the concerned citizens, there are various groups
of people that are interested in any decisions about the environment. The interested
groups would be the community, the future generation and nature itself. A study of
Polonsky’s work (1994a) revealed that there could be several reasons for this
interested group to damage the environment. The reasons comprise: no alternatives,
too cheap, they do not understand the issue, they have no time, it is not convenient
and it is due to their laziness, as shown in Figure 2.20. This figure represents reasons
why people damage the environment.
Figure 2.20
Reasons for damaging the environment
Source: Polonsky (1994a), p. 8.
An ethical decision is a decision that is made, which is legal, and morally acceptable
to a large number of people (Jones, 1991). It has its own foundation. Table 2.30
Too cheap(8%)
Don't understand issue (10%)
No time (12%)
Not convenient
(21%)
Lazy (23%)
No alternatives
(26%) 26%
represents the foundation for ethical decision making. The values profiles of power-
oriented, recognition-oriented, affiliation-oriented and accomplishment-oriented
reflect the moral philosophies of respect for persons, beneficence, non-maleficence
and justice, respectively. The process of making decisions ethically is “exciting” as it
offers opportunities, especially in the “ambiguous” research arena (Ford and
Richardson, 1994). Many ethical decisions making researches have been done in
previous years.
Table 2.30
Foundations for Ethical Decision Making
Values Profiles Philosophical Basis Moral Philosophies
Power-oriented
Recognition-oriented
Affiliation-oriented
Accomplishment-oriented
Utilitarian/teleological
Deontological
Integrity-based
Respect for persons
Beneficence
Non-maleficence
Justice
Source: Peer and Rakich (1999), p. 9.
Table 2.31 represents empirical evidence relating factors not specific to the
individuals and ethical decision making. This table includes the variable study, name
of the author(s), year of publication, sample, method and finding of the empirical
evidence. Cottone and Claus (2000) utilize a table that summarizes the steps or stages
of practice in ethical decision making models from the American Counseling
Association. The summary steps are shown in Appendix Table 7.
Table 2.31
Empirical Evidence Relating Factors Not Specific to the Individuals and Ethical D-Making
Variable Study (Year) Sample Method Finding Referent Groups Peer Group Influence Dubinsky and Loken (1989) Salespeople Questionnaire Intenders more likely (Ajzen and Fishbein to feel pressure from Model) referents, especially top mgmt. & supervisors Izraeli (1988) Israeli Ques. (Newstrom What peers do was Managers and Ruch, 1975) the best predictors of ethical behaviour Pratt and McLaughlin (1989) Students Questionnaire Students more sensitive to their professors’ beliefs as ethical
benchmark than peer beliefs
Zey-Ferrell and Ferrell (1982) Advertising Ques. (Newstrom Interorganizational Managers and Ruch, 1975) referent groups less
likely to influence behaviour
Zey-Ferrell et al. (1979) Marketing Questionnaire Perceptions of peers’
Managers behaviour influenced unethical beh. More than respondents own beliefs
Top Management Influence Akkah and Riordan (1989) Marketers Scenarios - Absence of top mgmt. (Crowford, 1970) actions against
unethical behaviour in stronger approval of questionable practices
Murphy et al. (1992) Managers Questionnaire Actions of Top Mgrs. had minimal influence on organizational
and Ruch, 1975) Zey-Ferrell et al. (1979) Managers Questionnaire Not significant
Variable Study (Year) Sample Method Finding Rewards & Sanctions Fritzsche and Becker (1983) Marketers Vignettes Severe consequences leads to actions that
are perceived to be supported by top management
Hegarty and Sims (1978) Grad. Stud. Lab experiment Rewarding unethical behaviour increase unethical behaviour Hunt et al. (1984) Market Questionnaire Top mgmt. actions
Researchers reduce ethical problems Laczniak and MBA Stud. In-Basket Mixed discipline to Inderrienden (1987) ethical behaviour Codes of Conducts Akaah and Riordan (1989) Marketers Scenarios - Not significant (Crowford, 1970) Chonko and Hunt (1985) Managers Questionnaire Codes affect mgrs. perception of the extent of ethical problems Ferrell and Skinner (1988) Marketing Questionnaire Enforced Codes
Researchers assoc. w/higher levels of ethical behaviour for data subcontracts & research firms, but not corp. researchers.
Hegarty and Sims (1979) Grad. Stud. Lab experiment Codes of conduct were positively related to ethical behaviour Hunt et al. (1984) Marketing Questionnaire Not significant Researchers Laczniak and Inderrieden (1987)Students In-Basket Codes+sanctions leads to more ethical behav. Murphy et al. (1992) Managers Questionnaire weak support Singhapakdi and Vitell (1990) Marketing Questionnaire Ethical policy Managers determines extent to
Which sales executives see ethical problems
Variable Study (Year) Sample Method Finding Codes of Conducts (continued) Weeks and Nantel (1992) Salespeople Questionnaire Well communicated
code of ethics related to ethical sales force behaviour
Types of Ethical Conflict Fritzshe and Becker (1983) Marketing Scenarios Rejected hypothesis
that managerial behaviour was invariant across types of ethical problems
Weber (1990) Managers Interview Dilemma type affected
moral reasoning of managers
Organizational Level Akaah and Riordan (1989) Marketers Scenarios - Not significant (Crawford, 1970) Chonko and Hunt (1985) Managers Questionnaire Higher level mgrs. less
likely to see ethical problems
Delaney and Sockell (1992) Columbia U. Questionnaire Lower level mgrs. Alumni perceived greater need to
be unethical to get ahead than upper level mgrs.
Izraeli et al. (1992) Bank Interview Knowledge of ethical
Employees problems & perceived seriousness of ethical problems was influenced by level in the hierarchy
Posner and Schmidt (1987) Managers Questionnaire Lower level mgrs.
were more pessimistic concerning the ethical character of their org.
Source: Adapted from Ford and Richardson (1994), p. 213-215.
However, making decisions and taking actions that are free from environmental
implications are impossible as the world is shrinking and more interdependent
economically (Fox and McAvoy, 1991). According to Trevino (1986), the theory is
not designed for the purpose of predicting and explaining and lacks face-validity.
However, businesses can consider the priorities outlined by Thomas (2002: 84) in the
public sector decision making in order to overcome this problem. The priorities lie in
developing an ethos of caring for the environment, for staff, for the community,
emphasizing leadership, example from the top and upholding of true standards of
conduct, training in the processes of decision-making to develop judgment in respect
of qualitative values, and in balancing these with “value for money” criteria to reach
fair decisions (rather than an over-reliance on “value for money”), education and
awareness programmes using case-studies, as referred to earlier and taking an active
role within departments in identifying cases and sufficient resources to implement the
chosen priorities.
Also outlined by Thomas (2002) are taking lateral (and/or coordinated) approach
across a policy area to incorporate the legal, social and environmental views and not a
narrow economic approach, accommodating short and long-term goals without undue
reliance on short-termism and setting up some emergency apparatus to deal with
unforeseen and unexpected events, which may require immediate consideration and a
restructuring of priorities.
2.12 THE CULTURAL ASPECTS
Organizational culture is typically defined as ‘the way we do things around here’
This is because in running its activities, the manufacturing processes are actually
scarring the globe, contaminating and threatening the environment, warming the
planet, thinning the ozone layer, decimating the forests, decreasing the health of our
water and air (Shaw and Barry, 1992) and also polluting the rivers quite severely
(Harvey, 1994). The stated pollution issues were deemed to be the factor that
precedes corporations’ poor financial performance (Hart and Ajuha, 1996).
Manufacturing firms have played an active role in environmental sustainable
development. Shrivastava (1995a) stresses that corporations are the primary engines
of economic development. Schmidheiny (1992) emphasizes that manufacturing
companies have financial resourses, technology knowledge and institutional
capacity to implement ecological solutions. While Stead and Stead (1992) add that
the examination of ecological sustainability at this organizational level of analysis is
both appropriate for this audience and weak in the management literature.
However, in an effort to achieve sustainable development, manufacturing industries
are exposed to several obstacles. The obstacles are technological, financial, labour-
force related, regulatory, customer-related, supplier-related and managerial
(Ashford, 1993), conceptual, organizational, knowledge availability, technical and
economic obstacles (Dieleman and de Hoo, 1993). In order to make tough
decisions, Skinner (1969) identified certain important trade-off decisions in the
manufacturing sector, as shown in Table 2.32. Here, top managers need to
continuously review the corporate strategy and recognize the alternatives in order to
identify the decision area.
The decision areas include plant and equipment, production planning and control,
labour and staffing, product design/engineering as well as organization and
management. In the plant and equipment decision area the alternatives include make
or buy, one big or several smaller ones, locate near markets or locate near materials,
invest mainly in buildings or equipment or inventories or research, general-purpose
or special-purpose equipment and temporary, minimum tooling or “production
tooling”.
In production planning and control, companies can choose few or many breaks in
production for buffer stocks, high inventory or a lower inventory, control in great
detail or in lesser detail, controls designed to minimize machine downtime or labour
cost or time in process or to maximize output of particular products or material
usage, high reliability and quality or low costs and formal or informal or none at all.
While for labour and staffing, companies can choose highly specialized or not
highly specialized, technically trained first-line supervisors or non-technically
trained supervisors, many job grades or few job grades, close supervision or loose
supervision and many or few such men.
Table 2.32
Some Important Trade-off Decisions in Manufacturing - or “you can’t have it both ways”
Decision Area Decision Alternatives Plant and Equipment Span of processes
Plant size Plant location Investment decisions Choice of equipment Kind of tooling
Make or buy. One big or several smaller ones. Locate near markets or locate near materials. Invest mainly in buildings or equipment or inventories or research. General-purpose or special-purpose equipment. Temporary, minimum tooling or “production tooling”.
Production Planning and Control
Frequency of inventory taking Inventory size Degree of inventory control What to control Quality control Use of standards
Few or many breaks in production for buffer stocks. High inventory or a lower inventory. Control in great detail or in lesser detail. Controls designed to minimize machine downtime or labour cost or time in process or to maximize output of particular products or material usage. High reliability and quality or low costs Formal or informal or none at all
Labour and Staffing Job specialization Supervision Wage system Supervision Industrial engineers
Highly specialized or not highly specialized Technically trained first-line supervisors or non-technically trained supervisors. Many job grades or few job grades. Close supervision or loose supervision. Many or few such men.
Product design/engineering
Size of product line Design stability Technological risk Engineering Use of manufacturing engineering
Many customer specials or few specials or none at all. Frozen design or many engineering change orders. Use of new processes improved by competitors or follow-the-leader policy. Complete packaged design or design-as-you-go approach. Few or many manufacturing engineers.
Organization and management
Kind of organization Executive use of time Degree of risk assumed Use of staff Executive style
Functional or product focus or geographical or other. High involvement in investment or production planning or cost control or quality control of other activities. Decisions based on much or little information. Large or small staff group. Much or little involvement in detail, authoritarian or nondirective style, much or little contact with organization.
Source: Skinner (1969), p.141
Above all, there are many reasons for industrial activities to contain an ethical
dimension. Trevino (1986) highlights that ethical problems do exist and emphasizes
that managers do think about ethical dilemmas. This is because the manufacturing
activities could jeopardize the health and welfare of the ecosystems and have
significant ramifications on the environment (Flannery and May, 2000). It is the
nature of corporations to have an environmental impact and the corporations will
also do their best to reduce these impacts (Saha and Darnton, 2005), as it is claimed
to be the right thing to do (Bansal and Roth, 2000).
The manufacturing industry can gain benefit by producing safe products to result in
loyal customers, disease remission or eradication, employee pride and motivation,
good reputation and better recruiting status while doing the wrong thing or
producing an unsafe product can result in public scrutiny, negative press,
legislation, regulation, litigation and could increase the cost of production (Harrison
and Lewellyn, 2004).
2.14 THE ENVIRONMENTAL ETHICS MANAGERS
Thirteen years ago, manufacturing managers were claimed to neglect the corporate
strategy and top executives tended to avoid the policymaking process (Skinner,
1969). During those years, the observation, measurement and manipulation of
managers’ ethics were not allowed (Trevino, 1986). However, executives’
personalities and experience are important as they can affect the organizational
outcomes (Bantel and Jackson, 1989; Miller and Droge, 1986). In addition,
Primeaux and Stieber (1994) and Skinner (1988) claimed that managers do
make mistakes like other occupations do as they barter their ethics for a money
price in relation to their ethical business evaluation. This is because managers often
lack the experience and skill to understand the full cost of pollution (Jaffe et al.,
1995).
Weaver et al. (1999) claimed that most top managers would likely agree that they
are committed to ethics but the commitment can easily be lost as they face ethical
dilemmas and tend to visualize environmental issues in legal rather than moral
terms (Flannery and May, 2000). However, corporations are now starting to change
their perspectives with highly committed top management exercising well-
integrated ethical practices (Weaver et al., 1999). This kind of committed and
ambitious manager (Logsdon, 2004) is highly needed in modern society (Egri and
Herman, 2000).
The managers so called ethics or compliance and environmental managers can be
defined as leaders in the arena of business conduct with responsibilities for
identifying, implementing, integrating and dealing with ethical compliance activities
in the decision making processes at all levels of the organizations (Weber and
Fortun, 2005; Cordano and Frieze, 2000). Figure 2.23 represents the primary job
responsibilities for ethics and compliance officers.
Figure 2.23
Primary Job Responsibilities for Ethics and Compliance Officers
Source: Weber and Fortun (2005), p. 107.
Some of the ethics and compliance officers’ job responsibilities include performing
audits, carrying out training, ensuring compliance, promoting ethics and conducting
investigations. Hayes (1982) emphasizes that managers have the “X-factor” to
influence the society and they do deserve, earn and retain good judgment for their
ethical behaviour. Managers are abiding by rules, regulations, and obligations. The
ultimate obligation is to provide and secure high returns to the stakeholder as their
top priority (Alam, 1995; Freeman, 1984). Besides these obligations, corporations
have also non-financial obligations.
According to Weaver et al. (1999), the tasks of managers are to do the right thing, be
fair to the community and to be a good member of the society. This could be
achieved by considering an investment to prescribe policies, strategies and structures
to symbolize commitment to preserve the environment (Weaver et al., 1999). While
7%
12%
19%
19%
29%
14%
Perform audits Promote ethics Carry out training Conduct investigation Ensure compliance Other
dealing with difficult environmental issues, it is important for managers to remember
and concentrate on the concept of environmental ethics (Kauffman, 2001) in order to
find the “focal point” of business and the environment (Walley and Whitehead,
1994).
Many researches have helped managers in many ways. A research carried out by
Sharma (2000) provides employees with a wider selection of environmental strategies
for reducing ecological impact and the research made by Hanna et al. (2000) provides
managers with the basic understanding of employee involvement for environmental
improvement. This effort would definitely benefit leaders and managers, practically
and morally, as traditionally it only concerned the philosophers, academics and social
critics (McNamara, 1999).
Nevertheless, today’s managers face many challenges. In order to achieve an optimal
level of environmental performance, Logsdon (2004) suggests a few considerations
that comprise environmental realities, the fundamental ethical principles and also the
stakeholder needs. Managers also find it difficult to manage change and human
resources (Dechant and Altman, 1994). According to Porter and van der Linde
(1995), there are numerous barriers to “change” as managers often deal with
insufficient information and have limited time and attention. This is because
managers consider environmental issues as complex, scientific, undetectable,
incalculable (Shrivastava, 1995a) and highly expensive (Cordano and Frieze, 2000),
thus, enabling them to pin point faults and recognize what to alter in the business
system in order to respond to environmental issues (Schmidheiny, 1992; Shrivastava,
1995a).
2.15 THE CORE THEMES OF THE CORPORATIONS
Previous research in the area of the natural environment adopted a variety of
approaches. These approaches or so called core themes are best suited to achieve
environmental considerations and are set at the best researchers knowledge and
expertise. Many core themes emerged as the main topic of articles and as popular
topics of research. The area of environmental ethics has been researched in many
core themes, among the frequent topics being researched are ethical decision making,
stakeholder theory, ecological sustainability and environmental performance. Among
others, ethical decision making has been researched by Trevino (1986), Jones
(1991a), Ford and Richardson (1994), and Flannery and May (2000).
Most environmental sustainability research was carried out after the term “sustainable
development” was first introduced in the Earth Summit in 1992. Sustainable
development was studied by Gladwin et al. (1995), ecological sustainable
organization was studied by Starik and Rands (1995), and ecological sustainability by
Shrivastava (1995a). As early as 1979, Caroll (1979) studied the corporate social
responses that differentiate corporations’ responsibility and responsiveness. Later,
ecological responsiveness was carried out by Bansal and Roth (2000). Both corporate
social performance and corporate environmental performance were carried out in
1985 and 1997. Corporate social performance was carried out by Wartick and
Cochran (1985), and corporate environmental performance was carried out by Russo
and Fouts (1997).
Research on stakeholders has been carried out in many forms, some researched the
stakeholder as a whole and others researched a small number of stakeholders, perhaps
even one stakeholder, for example, the consumer. Stakeholder theory was used by
Donaldson and Preston (1995), and Freeman (1999). Environmental commitment and
stakeholder was carried out by Henriques and Sadorsky (1999) while stakeholder,
social response and performance by Harrison and Freeman (1999). Customer contact
on environmental initiative was done by Foster Jr. et al. (2000), supplier and
environmental innovation by Geffen and Rottenberg (2000), and employee
involvement by Hanna et al. (2000).
Other core themes include: environmental issues championing (Andersson and
Bateman, 2000), supervisory support (Ramus and Steger, 2000), pollution reduction
preferences (Cordano and Frieze, 2000), environmental ethical decision making
(Flannery and May, 2000), best practices (Christmann, 2000), environmental strategy
(Sharma, 2000), industry self-regulation (King and Lenox, 2000), ethics and
compliance officer (Weber and Fortun, 2005), and also ISO 14001 and continuous
source reduction programme (Kitazawa and Sarkis, 2000).
2.16 THE ENVIRONMENTAL ETHICS APPROACHES
Hart (1995) demonstrates three specific approaches to the natural environment.
According to Hart, in the 1970s, corporations focused on pollution prevention, in the
1980s corporations concentrated on the product stewardship approach and in the
1990s corporations were introduced to sustainable development. Tilley (2000) also
identified two main approaches to environmental ethics that come from two
perspectives – the human perspective and the deep ecology perspective.
The first perspective seeks to define a code of conduct for environmental ethics. It
comprises a dominant worldwide, shallow ecology, and moves towards
anthropocentric that visualizes the greed of humanity while the other perspectives
offer the idea of a new worldview and deep ecology and move towards ecocentric,
which values nature above all other things. However, Tilley further agrees with Fox
and McAvoy (1991) by emphasizing that it is difficult to interpret the school of
thought in which deep ecology falls. These perspectives are shown in Table 2.33
below.
Table 2.33
Environmental Ethics: Summary Characteristics of the Two Main Approaches
Code of Conduct State of Being Dominant Worldview Shallow ecology Conventional ethical discourse Hierarchical Individualistic/Atomistic Anthropocentric
New Worldview Deep Ecology New ethical discourse Systematic Holistic Ecocentric
Source: Tilley (2000), p. 32.
In 1998, Aragon-Correa (1998) came out with various types of approach. Basically
the approaches came from the two dominant streams of literature. Environmental
management literature represents approaches recommended by Roome (1992), and
Hunt and Auster (1990) while the corporate social responsibility literature represents
approaches recommended by Wartick and Cochran (1985), and Caroll (1979). Table
2.34 represents practically four types of approach together with their specific
characteristics. The basic types of approach include reactive, defensive,
accommodative and proactive. The best known type and widely used is the approach
recommended by Roome (1992), which comprises non-compliance, compliance,
compliance plus, commercial and environmental excellent and leading edge
(Henriques and Sadorsky, 1999). The characteristics of noncompliance include no
support or involvement of top management, environmental management is not
necessary, no environmental reporting, no employee environmental training and
involvement.
However, the characteristics of proactive include top management supports and is
involved in environmental issues, environmental management is an important
business function, internal and external reporting, employee environmental training
and involvement encouraged. Another set of approaches is proposed by Hunt and
Auster (1990) with five distinct stages that starts from the “beginner”, which provide
minimal protection to the “proactivist”, which visualizes aggressive efforts to reduce
environment risk. These five distinct stages of programme development are shown in
Table 2.35.
Table 2.34
Conceptual Classification of Firm’s Approaches to the Natural Environment
Environmental Management Literature
Corporate Social Responsibility Literature
Roome (1992) Hunt and Auster (1990)
Wartick and Cochran (1985); Caroll (1979)
Characteristics
Noncompliance Beginner Reactive - No support or involvement of top management. - Environmental management is not necessary. - No environmental reporting. - No employee environmental training and involvement.
Compliance Firefighter Defensive - Piecemeal involvement by top management. - Environmental issues only dealt with when necessary. - Satisfy environmental regulations. - Little employee environmental training and involvement.
Compliance plus Concerned citizen
Accommodative - Some involvement by top management. - Environmental management is a worthwhile function. - Internal reporting but little external reporting. - Some employee environmental training and involvement.
Commercial and environmental excellence
Pragmatist Proactive
- Top management supports and is involved in environmental issues. - Environmental management is an important business function. - Internal and external reporting. - Employee environmental training and involvement
Leading edge Proactivist
Source: Henriques and Sadorsky (1999), p. 88.
Table 2.35
Developmental Stages of Corporate Environmental Management Programmes
Criteria Stage One “Beginner”
Stage Two “Fire Fighter”
Stage Three “Concerned Citizen”
Stage Four “Pragmatist”
Stage Five “Proactivist”
Degree to which Program Reduces Environmental Risk
No protection Minimal protection
Moderate protection
Comprehensive protection
Maximum protection
Commitment of Organization -General Mindset of Corporate Managers -Resource Commitment -Support and Involvement of Top Management
Environmental management is unnecessary Minimal resource commitment No involvement
Environmental issues should be addressed only as necessary Budgets for problems as they occur Piecemeal involvement
Environmental management is worthwhile function Consistent, yet minimum budget Commitment in theory
Environmental management is an important business function Generally sufficient funding Aware and moderately involved
Environmental management is priority item Open-ended funding Actively involved
Programme Design - Performance Objectives - Integration with company - Reporting structures - Involvement with:
Legal Council
Public Relations
Manufacturing/Production
Product Design
None Not integrated No reporting None None None None None
Resolve problems as they occur Involved with other departments on piecemeal basis Exceptions reporting only Exceptions reporting only Moderate None None None
Satisfy corporate responsibility Minimal interaction with other departments Generates voluminous reports that are rarely read Internal reporting only Moderate Moderate None None
Minimize negative environmental impacts Moderate integration with other departments Generates voluminous reports that are rarely read Mostly internal with some external reporting High High Moderate Minimal
Actively manage environmental matters Actively involved with other departments Personal meetings with managers and board of directors Formalized internal and external reporting mechanisms Daily Daily Daily Daily
Source: Hunt and Auster (1990), p.9.
However, a “proactive” approach is likely to be the best approach to comply.
Nevertheless, this approach is hard to apply as corporations have to sacrifice a lot of
things in terms of cost to change the overall systems and have difficulty in
managing change among employees. Once achieved, the corporations would have a
first hand advantage as they could lead the industry to achieve competitive
advantage, retain customers and gain more interested people in the activities of the
company that could be translated into profitability. Strachan (1997) summarizes
some of the managerial and organizational features of proactive environmental
organizations, as illustrated in Table 2.36.
The features include vision and mission, strategic and operational planning,
management structure, systems and decision making, the management of people and
internal and external communication. One of the descriptions would be the vision
and mission that is to provide the focus and energy for environmental action and
learning these organizations have developed a shared vision as opposed to the all
too familiar “mission statement”. In doing this they have learned to unearth and
develop shared pictures of the firm’s future based on common values and norms
that foster a genuine commitment to the improvement in environmental standards.
Table 2.36
Some of the Managerial and Organizational Features of Proactive Environmental
Organizations
Managerial and organizational features
Description
Vision and mission
To provide the focus and energy for environmental action and learning these organizations have developed a shared vision as opposed to the all too familiar “mission statement”. In doing this they have learned to unearth and develop shared pictures of the firm’s future based on common values and norms that foster a genuine commitment to the rising of environmental standards.
Strategic and operational planning
These firms have also formulated and implemented environmental policies, plans and programmes in a way, which consciously integrates business and environmental goals and targets. A key feature in both the formulation and implementation of these has been the use of participative styles of leadership and management, involving employee involvement schemes including teamwork.
Management structure, systems and decision making
These firms have also developed flat management structures based on team working. These firms also disperse decision making across their organization’s management structures. This is based more on expertise than formal authority. These firms have also designed systems of accounting, budgeting and reporting to assist decision making on environmental issues. To support these, firms have also recognized the use of information technology to empower and energize staff.
The management of people
These firms have also recognized the importance of developing their human resources and the need for environmental training at all levels and functions of their organizations. They have also developed both formal and informal rewards and have integrated environmental considerations into performance appraisal.
Internal and external
communication
To exchange environmental information and promote collaboration on environmental issues across their organizations these firms have also recognized the importance of open communication networks and have developed strategies accordingly, including the use of campaigns on environmental issues. Externally, these firms also interact and exchange expertise with a wide range of organizations responsible for the formulation and implementation of environmental policy locally, nationally and internationally.
Source: Strachan (1997), p15.
Another description is internal and external communication, that is, to exchange
environmental information and promote collaboration on environmental issues
across their organizations. These firms have also recognized the importance of
open communication networks and have developed strategies accordingly,
including the use of campaigns on environmental issues. Externally, these firms
also interact and exchange expertise with a wide range of organizations
responsible for the formulation and implementation of environmental policy
locally, nationally and internationally.
Once corporations decide to go “proactive” in their environmental agenda, they
must take a few steps, as proposed by Hunt and Auster (1990) in Table 2.37. Some
of the steps are secure top level commitment and long-term funding, develop a
corporate environmental policy statement, assign a senior executive to champion the
programme, assess areas of environmental exposure (i.e. conduct environmental
audits and legal reviews) and appoint a manager with supervisor managerial skills
and influence within the organization.
Table 2.37
Checklist for Implementing a Proactive Environmental Management Programme
____ Secure top level commitment and long term funding.
____ Develop a corporate environmental policy statement.
____ Assign a senior executive to champion the programme.
____ Assess areas of environmental exposure (i.e. conduct environmental audits and
legal reviews).
____ Appoint a manager with supervisor managerial skills and influence within the
organization.
____ Prioritize programme goals and objectives.
____ Revise corporate organizational structure to maximize programme’s visibility,
accessibility and effectiveness.
____ Develop format reporting relationships within the department and across
divisions.
____ Identify key individuals in other divisions to serve as liaisons with the
environmental department.
____ Develop streamlined yet comprehensive management information and record-
keeping systems.
____ Develop formalized inspection programmes.
____ Develop training and education programmes for environmental staff and key
individuals in other divisions.
____ Establish a career track for environmental professionals.
____ Continually re-evaluate programme needs and design.
Source: Hunt and Auster (1990), p. 16.
Mellema (1994) stresses three categories of human actions that have been recognized
as the traditional approach to ethics. The actions comprise acts that have a duty or
obligation to perform, to omit and also the acts that are morally neutral. These acts
are rationalized in terms of corporations’ approaches due to several evolving factors.
Some of the factors are the increasing costs of traditional modes or compliance and
advances in materials and process technology (Richardson and Pearson, 1998). Other
factors include learning component (Post and Altman, 1992), strategic competitive
advantage (Hart, 1995), learning and legitimation (Rindora and Kinnely, 1975) and
many other possible theoretical explanations (Ransom and Lober, 1999). All these
factors bring business and public policy to focus on improving the environment and
minimizing the cost of environmental improvement (Quinn, 1971).
As early as in the 1960s, Skinner (1969) suggested a “top down” approach to
manufacturing firms that concern the manufacturing policy. Satisfaction was of the
highest concern, where it will increase employees’ morale when they find the job to
be “exciting” as the executives will be familiar with their workflow. Similar
approaches were also proposed by other researchers. Some of the initiatives include
ownership, scale, sector, business relationship, management education and
experience (Dasgupta et al., 1997), individual organizational, political/economic,
social/cultural, ecological levels (Starik and Rands, 1995), management ethics,
protection and conversation of physical facilities, aesthetics (Handfield et al., 1997),
concern over liabilities and firm competitiveness (Porter and van der Linde, 1995).
Other motives include top management (Weaver et al., 1999), senior management
values and availability of resources (Klassen, 2000), policymakers (Sharma, 2000),
investors and investment fund managers, competition (Harrison and Freeman, 1999),
ecological values (Vrendenberg and Westley, 1993) and fiscal policies (Quinn, 1971).
Besides, the listed motives, Newman and Breeden (1992) outline some important
elements for a successful adoption of the nature into the corporate setting, as shown
in Table 2.39. Some of the elements include having a vision, design for excellence
and achieve continuous improvement aspects such as having a clear vision, having a
strategic programme and change management.
In order to develop a vision, companies have to provide the guiding principles and
policies for all environmental actions and delineate the means by which the
environmental vision will be achieved. Continuous improvement can be achieved by
focusing management and employee efforts to achieve the environmental goals,
focusing efforts on high priority programmes such as risk management, legislative
and regulatory proactive and contractor and supplier involvement and by looking at
certain other elements. In order to achieve excellence in design, companies have to
integrate environment issues into all planning processes and support effective
communication and match environmental goals with corporate culture.
Table 2.39
High Performance Model
Key Elements Explanation
Set V
ision
Clear Vision Corporate Strategy and Programmes
Provides the guiding principles and policy for all environmental actions. Delineates the means by which the environmental vision will be achieved.
Des
ign
E
xcel
lenc
e
Planning Processes Organizational Structure and Responsibilities
Integrates environment issues into all planning processes (i.e. investments, marketing, R&D). Supports effective communication and matches environmental goals with corporate culture.
Ach
ieve
Con
tinuo
us Im
prov
emen
t
Performance Measure Reward and Recognition Strategic Programme Training and Management Development Communication and Information Management Change Management
Focuses management and employee efforts to achieve the environmental goals. Individual and team rewards explicitly linked to accomplishing performance measures. Focuses efforts on high priority programmes such as risk management, legislative and regulatory proactive and contractor and supplier involvement. Instils the skills required to fulfil assignment responsibilities and increase environmental awareness. Ensures accessibility to relevant data and enhances decision-making capabilities. Addresses the internal obstacles to implementation.
Source: Newman and Breeden (1992), p. 218.
Bansal and Roth (2000) argued that understanding these motives is critical because it
could lead to behaviour prediction and expose ecological sustainable mechanisms to
researchers, managers and policymakers. These motivations are important to
committed community as it has been proven beneficial. Motivated by stringent
regulations, the greening effort and reallocation of the most polluting activities to the
emerging market economies has resulted in the pollution in developed economies
being relatively low (Hart, 1997).
In addition, Winter (1995) focused on three reasons for corporations to introduce a
sound environmental management. The reasons are to accept the responsibility,
knowing the vast opportunities and avoid or reduce the risk that eventually could
conserve the natural resources, increase income and also to increase a corporation’s
environment reputation. Furthermore, Tilt (1994) emphasized that corporations
motivation to protect the natural environment is based on the pressure to disclose
their activities by the environmental movement.
2.18 THE BENEFITS OF ENVIRONMENTAL ETHICAL COMMITMENT
Moving towards environmental sustainability could benefit corporations in many
ways. Many broad as well as short-term benefits were discussed in many research
findings. They came in various approaches, detailed benefits and broadly explained
opportunities (Sroufe et al., 2000; Saha and Darnton, 2005; Starik and Marcus, 2000)
from the business process that considers the social, moral and ethical factors. These
benefits are interpreted into quality of life such as customer satisfaction, quality of
work life and environmental impact, as shown in Table 2.40.
Table 2.40
The Business Process Framework
Inputs Processes Outputs Quality of life outcomes
Resources Product/services
Employee satisfaction
Pollution
Customer satisfaction
Quality of work life
Environmental impact
Source: Stainer and Stainer (1997), p.228.
Some of the benefits are to achieve cost leadership and competitive advantage
(Shrivastava, 1995; Saha and Darnton, 2005; Starik and Marcus, 2000; Hart, 1995;
Porter and van der Linde, 1995), boost profitability (Shrivastava, 1995a; Fistere,
1998; Theyel, 2000; Sroufe et al., 2000), improve public relations (Shrivastava,
1995a; Dechant and Altman, 1994) and improve ecological and business performance
(Porter and van der Linde, 1995; Shrivastava, 1995; Schmidheiny, 1992; Henriques
and Sadorsky, 1999; Sroufe et al., 2000; King and Lenox, 2000 and Theyel, 2000).
Other benefits include to capture the green market, achieve environmental leaders,
improve image of the company, reduce long term risk, reduce health expenses and
gain a firmer legal footing (Shrivastava, 1995a), gain stakeholder importance
(Henriques and Sadorsky, 1999), avoid environmental fines, better utilize raw
materials, rejuvenate employee morale (Sroufe et al., 2000), improve public
perception of the industry (King and Lenox, 2000), increase sales (Dechant and
Altman, 1994), gain interest from investing institutions, gain more business (Saha
and Darnton, 2005) and also create economic growth (Quinn, 1971).
A survey conducted in Newman and Breeden’s article (1992) revealed that
companies were offered a wide range of opportunities while dealing with core and
primary environmental products and services. These opportunities include improve or
lower cost of waste disposal, gain reputation for environmental responsibility, reduce
operating cost, more effective operations, venture in new environmental packaging,
gain new marketing for existing products and new green products, gain revenue from
pollution control products and finally corporations could somehow sell their pollution
compliance capacity, as shown in Figure 2.24. Stisser (1994) argued that in order to
retain a competitive position, some products and services must be widely known as
environmentally friendly or green products.
Figure 2.24
Diverse Opportunities in Environmental Products and Services in Companies’
Core Business
Source: Newman and Breeden (1992), p. 216.
2.19 SELECTED EMPIRICAL STUDIES IN ENVIRONMENTAL ETHICS
There are many studies of ethical issues in individual professions including law
(Kipnis, 1991), medicine (Randall and Gibson, 1991), accountancy (Brooks, 1989;
Andrew, 2000), as well as in the business field (Flannery and May, 2000).
Considerable research has been done in the area of corporations and the environment
and they have one ultimate goal, that is, to save the earth. The business ethics goal is
to retain stakeholders but the environmental ethics goal is to save the earth. These
efforts are phrased in many environmental terms, such as to achieve ecological
sustainability (Shrivastava, 1995a; Starik and Rands, 1995; Cordano and Frieze, 2000
and Egri and Herman, 2000), to mitigate a corporation’s negative impact on the
natural environment (Bansal and Roth, 2000; Klassen and Whybark, 1999), to help
determine the health and sustainability of the natural environment (Flannery and
May, 2000), and to improve a company’s environmental performance in order to
reduce the impact on the natural environment (Ramus and Steger, 2000) just to name
a few.
In the first ever research on the process of championing environmental issues,
Andersson and Bateman (2000) argued that it is hard for managers to deal with
environmental issues. They outline the environmental issues faced in the 1990s as air
pollution, solid waste disposal, top soil erosion, ozone layer depletion, population
growth, marine and fresh water pollution, toxic waste accumulation and disposal,
reduction in biodiversity, wetland destruction and deforestation. Also included is
climate modification, as proposed by Schmidheiny (1992). These environmental
scenarios can be “complex”, “exciting” (Starik and Rands, 1995), and “technical” and
normally are linked to industrial activities (Schmidheiny 1992; Shivastava, 1995a).
However, Andersson and Bateman (2000) in their research try to visualize how to
turn environmental issues into successful environmental championing through
individuals that act or serve as environmental champions. These “champions” or the
employees are said to be the best contributor of ideas in order to improve the
environment (Dechant and Altman, 1994). The results indicate that individuals who
successfully championed the environment engaged in more multiple-source
styles and used several influential tactics such as coalition building. These champions
were more successful when they treated the environment as important as any other
business function, framing environmental concerns as (financial) opportunities
(Sharma, 2000) and packaging and selling these concerns as they would for any other
business proposal.
From the data obtained from 73 corporations to develop a primary model of
environmental leadership, Egri and Herman (2000) stress that due to biophysical
environmental health threats; environmental leaders are forced to change economic
and social systems. As Sharma (2000), and Andersson and Bateman (2000) see the
“environment as an opportunity”, Egri and Herman (2000) see “environmentalism as
a commodity”. They find that environmental leaders in the United States of America
and Canada, especially those in non-profit organizations, were more ecologically
oriented, more open to change and more self-transcendent than leaders of other types
of organizations, as compared to managers in profit-making business, who exhibited
personal values, skills and leadership styles that were less oriented to environmental
change.
In another research of management and the natural environment, Ramus and Steger
(2000) indicated that a company’s performance can be improved by employee self-
identified actions. These actions were initiated by two prominent pressures –
“regulatory” and “stakeholder” – that will, ultimately, lead to employee
environmental initiatives. These initiatives were intended to achieve environmental
improvement and reduce the impact on the natural environment. These ecoinitiatives
could be any action taken by an employee that he or she thought would improve the
environmental performance of the company. They found that employees who
perceived strong signals of organizational and supervisory encouragement, along
with communication, rewards, recognition and published environmental policies were
more likely to develop and implement creative ideas that positively affected the
natural environment than employees who did not perceive such signals.
In another equivalent research, Cordano and Frieze (2000) used Ajzen’s Theory of
Planned Behaviour [TPB] (1985, 1991) to better understand the attitude of
individuals in order to analyse the behavioural preferences of environmental
managers. They used structural equation analysis to link the source reduction
preferences of 295 environmental managers from the Air and Waste Management
Association (AWMA) (the largest organization of environmental professionals in the
United States with 16,000 members at the time of study) to their pollution prevention
attitudes, their perception of norms for environmental regulation, their perceived
behavioural control and the past source reduction activity of their facilities.
Adding an organizational behaviour was the purpose of the study. The researchers
(Cordano and Frieze, 2000) examined the preferences of the managers on the activity
of pollution prevention. The managers were responsible to the state of the natural
environment. Focus was given to managers’ attitude as they have the responsibility
towards the activity of pollution prevention. Pollution prevention analyses together
with Ajzen’s TPB were used to support and develop the research model. The analysis
included regulatory, environment, technological development, stakeholder
relationship and organizational process.
It was concluded that communication barriers were against environmental
performance. In terms of the regulatory aspect, many environmental managers
portrayed positive attitudes towards pollution prevention but felt little pressure to
achieve environmental performance. By having a positive attitude towards pollution
prevention differentiates environmental managers and business managers and the
pressure felt by environmental managers hinders them in disseminating the
importance of pollution prevention, which could bring the companies economic gains
(Cordano and Frieze, 2000).
The results suggested that in order for the companies to achieve economic gains as
well as to sustain the ecology, they must understand the complex actions and
decisions pertaining to the natural world. They also agree with Andersson and
Bateman (2000), stating that managers face difficulties in dealing with environmental
issues. They highlight obstacles, outlined by other prominent researchers, Dieleman
and de Hoo (1993), and Ashford (1993), that manufacturing firms faced in order to
prevent waste as well as to prevent pollution.
The obstacles are regulatory, [labour, consumer, supplier-related also known as
stakeholders] (Ramus and Steger, 2000), conceptual obstacles, organizational or
managerial obstacles, availability of knowledge, technical or technological, and also
financial aspects. In line with these obstacles, the research found environmental
attitudes about pollution prevention, their assessment of norms about environmental
regulations and their past source reduction efforts were “positively” related to their
preferences to implement source reduction activities. Managers, however, still
selected easy-to-implement source reduction practices as a means of smoothing the
transition to more difficult ones.
In line with Cordano and Frieze (2000), Flannery and May (2000) researched the
managers environmental ethical decision making of United States metal finishing
companies’ environmental attitudes, norms, ethical climates, personal moral
obligation (PMO), self-efficacy and financial cost using the Theory of Planned
Behaviour (TPB). The investigation was about environmental ethical decision
intention based on individual and contextual influences. The respondents were ranked
managers in the United States metal finishing industries and the theoretical
framework was designed based on Ajzen’s (1991) TPB and the moral intensity of
Jones (1991).
Flannery and May (2000) argued that the decision making process is crucial when it
deals with the natural environment. The decisions made can jeopardize and have
significant ramifications, not only on the health of human beings but also on the other
living species if environmental ethical considerations are not considered. The results
show that environmental attitudes, norms (Cordano and Frieze, 2000) and ethical
climate were all “positively” associated with their managers’ environmental
intentions. This research was claimed to be the first ethical decision making study
grounded on the TPB to include financial cost as an external perceived behavioural
control factor, however, financial costs, personal moral obligation, and self-efficacy
were “negatively” associated with those intentions. In these companies, personal
moral obligation had little effect in moving managers towards making positive
environmental changes.
The results also indicated that the reconceptualization suggested that it is very
important for the managers to study the decision process in order to understand the
relationship between organizations and the state of the natural environmental health.
This is because reconceptualization benefits the companies by having a sustainable
environment. Although the organizational climate and the intensity of consequences
matters, managers are framing environmental issues as legal rather than moral.
Flannery and May’s (2000) research also emphasized that direct experience with the
natural environment has had a positive impact on environmental attitudes (Eagly and
Kulesa, 1997), which helps determine the sustainability and health of the biophysical
environment.
Christmann (2000) has researched the effects on firms’ performance of best practices
of environmental management. Her research focuses on “best practices” that were
claimed to be one of the key attributes by Newman and Breeden (1992) on pollution
prevention technologies. The research analyses whether complementary assets are
required to gain cost advantages from implementing practices. The results based on
survey data from 88 chemical companies indicated that capabilities for process
innovation and implementation are complementary assets that moderate the
relationship between best practices in environmental management and cost
advantage, a significant factor in determining firm performance. The best practices
may include the use of pollution prevention technologies, innovation of proprietary
pollution prevention technologies and also early timing.
Christmann (2000) suggested that existing resources and capabilities of the
companies need to be examined before environmental strategies are chosen, and that
the selection of environmental practices should be based on these two components. In
environmental strategy, the formulation point would start with a business strategy and
the creation of both resources and the capabilities. Christmann also suggested that
complementary assets should be created in a firm’s business strategy in order to
achieve firm’s performance.
Cost advantage could not be achieved through best practices for all firms.
Consideration of complementary assets are needed by corporations in order to
achieve a cost advantage and to become green. This means that the integration of
environment considerations into general business strategies is needed to benefit the
corporations in order for the corporations to achieve competitive advantage as well as
to be green (Christmann, 2000). It is also interesting to note that taking new product
design, for example, its complementary assets are assets that are required in terms of
resources as well as capabilities that are difficult for other firms to imitate, thus,
enabling the firm to capture the profits associated with a strategy, technology or
innovation (Teece, 1986).
Together with Christmann (2000), Dechant and Altman (1994) concentrate on the
best practices of companies in relation to environmental issues that translate the
corporations’ bottom line. Their approaches concentrated on Band-Aid solutions and
quick fixes in order to achieve corporations’ competitive advantage, either by
increasing sales or by improving public relations. In the 1970s the attitude of
environmental efforts were driven by government regulations and a desire to avoid
significant legal and financial liabilities. However, later, the motivation was to treat
the environment as an essential part of business and not as just a side issue. The
forces of greening are, staying ahead of regulations, stakeholder (consumers and
employees) activism (Ramus and Steger, 2000) and competitive pressures.
Nevertheless, they also list the obstacles in achieving environmental leadership, such
as difficulty to manage change and also to manage human resources. Once these
obstacles are overcome, higher business performance could be achieved with the
consideration of environmental management.
Sharma (2000) examined the links between managerial interpretations of
environmental issues and corporate choice of environmental strategy among 99 firms
in the oil and gas industry in Canada. He, together with Andersson and Bateman
(2000), conceptualized environmental issues as opportunities instead of threats and
chose proactive strategies rather than reactive, which influence a corporation’s
organizational strategy. Strachan (1997) argued that proactive environmental
organizations have their own features that merely transform the corporations into
learning organizations in their attempt to raise their environmental standards.
These proactive environmental organizational features are shown in Table 2.41 (This
table is re-exhibited for easy reference) while the deciding process of individuals to
either choose proactive or reactive is shown in Figure 2.25. The study of Sharma
(2000) also implies that a context should be created for managers as interested
employees to generate solutions for reducing the ecological impact. Again, regulators
(Ramus and Steger, 2000) and policymakers are urged to come out with a
methodology of how to address the environmental issues to guide research on
environmental performance.
Table 2.41
Some of the Managerial Organizational Features of Proactive Environmental Organisations
Source: Strachan (1997), p.15.
Managerial and organizational features
Description
Vision and mission Strategic and operational planning Management structure, systems and decision making The management of people Internal and external communication
To provide the focus and energy for environmental action and learning these organizations have developed a shared vision as opposed to the all too familiar “mission statement”. In doing this they have learned to unearth and develop shared pictures of the firm’s future based on common values and norms that foster a genuine commitment to the rising of environmental standards. These firms have also formulated and implemented environmental policies, plans and programmes in a way which consciously integrates business and environmental goals and targets. A key feature in both the formulation and implementation of these has been the use of participative styles of leadership and management, involving employee involvement schemes including teamwork. These firms have also developed flat management structures based on team working. These firms also disperse decision making across their organization’s management structures. This is based more on expertise than formal authority. These firms have also designed systems of accounting, budgeting and reporting to assist decision making on environmental issues. To support these, firms have also recognized the use of information technology to empower and energize staff. These firms have also recognized the importance of developing their human resources and the need for environmental training at all levels and functions of their organizations. They have also developed both formal and informal rewards and have integrated environmental considerations into performance appraisal. To exchange environmental information and promote collaboration on environmental issues across their organizations these firms have also recognized the importance of open communication networks and have developed strategies accordingly, including the use of campaigns on environmental issues. Externally, these firms also interact and exchange expertise with a wide range of organizations responsible for the formulation and implementation of environmental policy locally, nationally and internationally.
Figure 2.25
A Profile Analysis Process of Business Ethics Performance – Proactive Versus Reactive
Source: Svensson and Wood (2004), p. 25.
The research by Sharma (2000) found that in the Canadian oil and gas industry,
environmental strategies were associated with managerial interpretations of
The issues at hand
Internal Perception
Consequence (Weakness/Strength)
Performance (Acceptable/Unacceptable)
External Perception
Consequence (Threat/Opportunity)
Performance (Acceptable/Unacceptable)
Contingency Planning (Ethical Evaluation)
Proactive (A head of Expectations)
Reactive (Lagging Behind Expectations)
Contextual/Evolutionary Issues
environmental issues as either threats or opportunities and that the extent to which
some of these firms went further in incorporating environmental concerns into
decision making (Flannery and May, 2000) was heavily dependent on the degree to
which their managers perceived these issues as opportunities and not threats.
However, most of these organizations are still in the beginning stage of incorporating
sustainability into decision making.
In their research of industry self-regulation, King and Lenox (2000) researched
responsible care programmes on the chemical industry based on public opinion. They
argued that corporations are motivated to adopt self-regulation standards due to
government regulations and external pressures from various stakeholders (Ramus and
Steger, 2000). Their findings highlight the potential for opportunism (Andersson and
Bateman, 2000; Sharma, 2000) to overcome the powerful self-regulatory pressures.
Bansal and Roth (2000) in their article “Why companies go green” emphasized that it
pays to be green (Russo and Fouts, 1997) from the data collected from 53 firms in the
United Kingdom and Japan. They first identified four drivers of corporate ecological
response – legislation, stakeholders (Ramus and Steger, 2000; Cordano, 1993 and
Lampe et al., 1991), economic opportunities (Cordano, 1993; Porter and van der
Linde, 1995) and ethical motives (Harrison and Freeman, 1999; Lampe et al., 1991).
Due to the inadequate data that grounded the model and insufficient model
specification, they revealed three motivations on why companies go green and induce
ecological responsiveness. The three motivations are the competitiveness,
legitimation and ecological responsibility. They found that organizational self-interest
including elements of both competitiveness and legitimacy were needed to fuel the
movement towards eco responsibility. They also found that the corporation’s
responsiveness is directly related to competitiveness, legitimation and ecological
responsibility and could never go right with lack of one paradigm.
Many approaches to the natural environment have been characterized by many
researchers (Aragon-Correa, 1998; Henriques and Sadorsky, 1999). Aragon-Correa
(1998) focuses on corporate approaches to the natural environment and their
relationships to business strategy. He outlines 14 approaches to the natural
environment and later they were classified into different classifications derived from
Roome (1992). According to Roome (1992), a firm’s approach to the natural
environment would be characterized by noncompliance, compliance, compliance-
plus, commercial and natural environmental excellence and the leading edge.
Aragon-Correa (1998) also hypothesized that corporations with more proactive
business strategies will have more advanced approaches to the natural environment
than their competitors with less proactive business strategies.
Henriques and Sadorsky (1999) outlined six approaches to the natural environment.
According to them, natural environmental commitment is described as what a
company is actually doing or has done with reference to environmental issues. By
having the approaches to the natural environment, their research is to differentiate
between environmentally committed firms from less environmentally committed
firms. They highlight that government regulations and consumers are the most
important forms of stakeholder pressure (Ramus and Steger, 2000) and are of
increasing importance in environmental management. They also categorize four types
of stakeholder – regulatory stakeholders, organizational stakeholders, community
stakeholders and the media attention (Wartick, 1992). Interestingly, the study found
that as far as regulations are concerned, active action will be taken by corporations in
order to avoid unnecessary cost.
Harrison and Freeman (1999) also highlighted some factors that contribute to
environmental management. They are government regulations, consumers and
heightened ethical sensitivity. They also emphasize that effective stakeholder
management can help managers resolve ethical dilemmas (Freeman, 1984). Table
2.42 shows the most important studies considered by Fernandez et al. (2003). The
studies were done based on several analyses that include case analysis, regression
analysis, theoretical analysis, focus group, case study, structural equation model,
descriptive analysis and empirical analysis.
Table 2.42
Summary of the contributions
Article Contributions
Alberti et al.
(2000)
Implementation costs vary from business to business and are mainly
influenced by the following parameters: organizational structure,
lack of specific skills and availability of internal human resources.
Case analysis.
Anderson and
Bateman (2000)
The success of ‘environmental champions’, measured in relation to
several dimensions and among them the top management attention
to forming a team for the analysis of environmental issues depends
on the internal and external context (corporate environmental
paradigm, regulatory requirements and competitive pressures) and
other factors, such as scanning behaviours, issue framing and
presentation and the influence of behaviours and timing of selling.
Regression analysis.
Andersson and
Wolff (1996)
Once the learning of new procedures has been successfully
implemented, routines are established and maintained in the shape
of programmed control. Theoretical analysis.
Angell (2001) Successful initiatives are different depending on work style. Case
study.
Angell and
Klassen (1999)
Organizational culture, training and education and the importance of
the measurement systems influence the workforce involvement in
environmental management, similar to quality management. Focus
group.
Azzone et al.
(1997)
The company’s environmental culture and the employees ‘green’
competencies as dimensions of the environmental strategies. Case
analysis.
Azzone and Noci
(1998a)
Each environmental pattern affects human resource management in
a different way. Theoretical analysis.
Azzone and Noci
(1998b)
Changes in the management processes are necessary for the
development of innovative environmental programmes. Case
analysis.
Bamber et al.
(2000)
Team working and commitment to quality can be delivered through
implementing total productive maintenance and influence the
environmental performance. Case study.
Banerjee (1998)
(continued)
Commitment of senior managers is one possible input to the
environmental learning process. A double-loop approach to
environmental learning may also result in a change in the
organizational culture. Theoretical analysis.
Chinander (2001) Internal drivers such as communication of values and alignment will
influence a firm’s environmental performance. Firms need to pay
special attention to promotion feedback, education and quality
improvement in this area. Case study.
Cook and Seith
(1991)
Role of employees, benefits and development of an effective
programme. Theoretical analysis.
Cook and Seith
(1992)
Purpose of a training programme, defining goals, curriculum
development and selection of effective media. Theoretical analysis.
Corbett and
Cutler (2000)
Influence of employee involvement, measurement, management
attitudes to training, people and technology, communication,
environmental channels, commitment and culture. Case analysis.
Cramer and Roes
(1993)
Motives, forms and measures. Case analysis.
Curkovic et al.
(2000)
All aspects of human resource management (e.g. manpower
planning, recruitment and staffing, training and development,
performance appraisal and reward systems) assume strategic roles.
The best results can be obtained only when there is a high level of
involvement and commitment from trained people. Structural
equation model.
Daily and Huang
(2001)
A conceptual model of the environmental management systems.
Human resources factors are proposed to assist in proper facilitation
of environmental management programme. Theoretical analysis.
Dechant and
Altman (1994)
Examples in companies. Case analysis.
Egri and Herman
(2000)
Organizational structures in environmental sector. Regression
analysis.
Enandler and
Pannullo (1990)
Employee involvement and pollution prevention. Theoretical
analysis. (continued)
Epstein and Roy
(2001)
Organizational culture and processes to improve both social and
financial performance. Theoretical analysis.
Florida (1996) Worker involvement in pollution prevention. Descriptive analysis.
Forman and
Jorgensen (2001)
Participation of employees in a Danish context. Case analysis.
Griffiths and
Petrics (2001)
Corporate architectures for sustainability. Theoretical analysis.
Groenewegen
and Vergragt
(1991)
Environment, safety and health unit in environmental issues as
opportunities for technological innovation. Case study.
Gupta and
Sharma (1996)
Role of workforce management in environmental operations
management. Theoretical analysis.
Hallier (2001) Greenfield recruitment is a critical feature of Greenfield workplace
politics and practices. Theoretical analysis.
Handfield et al.
(2001)
People practices. Case study.
Hanna et al.
(2000)
Influence of employee practices on pollution prevention,
environmental and operational performance. Empirical analysis.
Kitazawa and
Sarkis (2000)
People practices and continuous sources of reduction programmes.
Case analysis.
Klassen (2000) Environmental department, procedures for encouraging cross-
functional integration of environmental issues, among others.
Empirical analysis.
Klassen (2001) Influence of manager’ organizational responsibility on plant-level
